John Powers discussed risks associated with decentralized finance (DeFi) with Paul Kilby, editor-in-chief of Fraud Magazine, published by the Association for Certified Fraud Examiners (ACFE).
Excerpts of their interview are featured in the July/August issue of the magazine, “Promises and Pitfalls: How Decentralized Finance is Creating New Opportunities for Fraudsters.” It states:
“We have seen a huge demand for cryptocurrency fraud investigations in the last two years,” says John Powers, CFE, president of Hudson Intelligence.
“CFEs with an eye on the future – and those who want to maintain relevance in today’s fast-evolving, technology-driven economy – cannot afford to ignore cryptocurrency and decentralized finance,” Powers says.
He explains why this innovative sector – which has attracted more than $100 billion in investment activity since 2020, according to industry sources – has emerged as a target-rich environment for financial fraudsters.
Their discussion covers technical factors that can make it more difficult to detect and investigate fraud in DeFi apps and platforms, including robust native anonymity, lack of Know-Your-Customer (KYC) credentialing, and the potential for bad actors to exploit vulnerabilities hidden in the code of smart contracts.
The full article is available to ACFE members and Fraud Magazine subscribers.
Hudson Intelligence is a private investigation firm specializing in international asset tracing and investigations of complex frauds and financial crimes. The firm works with investors, law firms, corporations and government agencies. Its licensed investigators and forensic analysts have coordinated on financial fraud investigations with the Federal Bureau of Investigation (FBI), Department of Homeland Security (DHS), Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and other agencies in the U.S. and abroad.